Established Mobile Service Providers while switching to 3G technologies have lost their subscribers to New Comers while in transition to 3G. One of the main reasons for this is that the New Comers are providing richer Mobile Content. The whole phenomenon stems from the fact that most service providers and the Content Providers do not have a vibrant revenue sharing model, the fallout is that the Mobile Content Generating Industry has become highly risky & the yield does not produce sufficient resources to develop richer content desirable for 3G.In case the revenue sharing does not get to be more in favor of Content providers & Content does not get richer the mobile operators will have no one else but themselves to blame if subscribers slip from their grasp.

A Lesson from the Japanese Mobile Market

The world paid attention when iMode, the wireless Internet service run by Japanese giant NTT DoCoMo outperformed AOL as the largest ISP on Earth, with 35 million subscribers in 2003. It took AOL 15 years to get to 30 million subscribers, while iMode accomplished it in three years. It put a hem on that mobile was the fastest-growing new content platform in history of communications. But DoCoMo stumbled during the transition to 3G. Second-place rival KDDI draped the momentum with innovative content, acquiring subscribers at a much faster rate. And third place Vodafone was annihilated in Japan during the 3G migration

World Wide Mobile Content Disparity

There is regional disparity in the case of mobile entertainment. The Far East, specifically Japan and Korea, is considered to be the leading region for uptake and acceptance of mobile entertainment. Europe is second in acceptance with Scandinavia, the UK and Italy being the most aggressive markets. The US, as far as the overall adoption of mobile services goes, trails when it comes to adoption of mobile entertainment services.

State of Mobile Content Providers

Market analyst reports are still forecasting multi-billion dollar industries for mobile games, mobile music and other forms of mobile entertainment. The most successful service to date is ring tones. In spite of the vast revenues being generated by mobile entertainment, insufficient amounts of these revenues flow through to the companies that are providing the content and technology. Operators make money through the use of the network regardless of the content. Content providers are having difficulty calculating the value of the content. Even in Japan, cited as the leader in delivering mobile content, 20% of the content providers are responsible for generating 80% of the revenue. Hence, most of the content providers are not generating profit and are in danger of halting operations.

Current Revenue Sharing Model

Mediocre content cannot command separate content fees above the network utilization fees. There is much discussion about the overall value chain and how revenue should be divided between the industry players. Most insiders advocate dividing all end-user fees among the value chain participants based on a revenue-sharing model. Despite their publicity, the content providers, the innovative start-up companies that created the industry, lack the influence and killer applications to command a reasonable share. The telecoms industry has not embraced this revenue-sharing premise, nor does it normally operate with such arrangements.

Telecom Operator Mindset.

Traditionally, telecoms operators are more accustomed to investing in technology, delivering a service and charging for that service in order to create a return on the investment. However, the problem lies in the fact that operators are not currently investing. As the major entertainment companies increasingly participate in the mobile space, the issue arises as to whether they will be strong enough to bring about some of the necessary changes. Wireless carriers with insipid marketing. uphold themselves as reliable telephone services that offer quality telecom nationwide coverage while Content is not a primary focus .The ambiguity in the telecoms' mentality are revealed in their operating budgets. The content team at the typical mobile carrier is understaffed and under resourced, tucked away in the bowels of the marketing department. These hardworking souls attempt to match the output of an entire cable TV company on a shoestring budget.The billing on behalf of others, or BOBO, fee structure utilized in Japan, where operators take a fee for billing for content, with the content providers keeping 91% of the content fees, is not sufficient for the content providers to maintain profitability. In 3G, this area necessitates more investment for the reason that the content is more complex.

Market Segmentation Failure

Failure to segment the market is another explanation for the lag. Carriers continue to repeat the mistake of selling the same product to everybody. Over 75% of American adults own a cell phone. Yet mobile content is presented in the same way to nearly every segment. The success of mobile-content services is dependant upon the carrier's ability to find lucrative niche audiences and deliver to their interests.

Slow Take-up rates

The third reason for the slow take-up rate is dreary merchandising. Every mobile operator offers a content mall, but these shorelines fail to match the ease of use of Apple Computer's iTunes store. Most mobile content storefronts are difficult to browse, which makes the process of discovery tedious. little wonder that merely die-hard enthusiasts have the stamina to hit upon new content. Carriers rely on content providers to rouse consumer demand. The resultant content offering seems drained, encrusted with the same names that dominate conventional media.

User Fatigue

The last reason is consumer fatigue. Mobile operators hate to admit that consumption per handset tapers off six months after a new phone is purchased. This could be a result of mediocre content due to the limitations of the media, or possibly what consumers perceive as the 'content' that they are paying for is the cost of the content and the cost of the network combined. If it is assumed that consumers are astute in realizing the total cost they pay to derive entertainment value, the issue of whether the cost of mobile entertainment is too expensive for the entertainment value would need to be addressed.

No new Investments

Each month, more appealing content becomes available. However, the media has its limitations and it is only when the content can justify a separate fee structure that the industry will reach mass market. Until then, the contention over the commercial model will continue to prevent companies from investing in mobile entertainment. In order to help market growth, the Mobile Entertainment Forum's (MEF's) commercial initiative should work towards a revenue model for the industry. Operators should start thinking about their true cost of delivering incremental network usage and how the balance should be distributed through the value chain that creates the incremental usage as well as get Rich 3G Content downloads to the Mobiles. The Revenue sharing model needs to be addressed right now, lest we would find it difficult to find a Robust and Stable Content Providing Industry which would match the content delivery and user features of a true 3G Network in the near future.

A Message to the Mobile Industry

Telco's have to learn from recent history and Analytically prepare themselves for sustained high growth in both Volumes and revenues from mobile content while in transit to next generation networks and delivering innovative, exclusive and richer content to the mobile user. Regardless of the current buzz about entertainment on cell phones, the Mobile content market has hit a speed bump. Wireless entertainment is Dithering during a critical transition to third-generation mobile telephony, or 3G. The stakes are soaring. The winners in this race will create annuity-Billing relationships with millions of consumers of new digital-Entertainment services. Having created this new market, the mobile operators will have no one but themselves to blame if subscribers slip from their grasp.